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the final days of May and the first day of June, 2005, two remarkable
events took place: one in France and the other in Holland. A large
majority of voters voted against the 332-page Constitution of the
European Union. To get the Constitution ratified, there had to be
100% acceptance by member nations.

means that the EU’s Constitution is dead, although we may see some
Dracula-like resurrections. This means that an 85-year conspiracy
— no other noun will suffice — has suffered its largest
setback so far.

can hear the responses from the mainstream media and the mainstream
professorate: "Conspiracy? How can you say that? Why, nothing
has been more aboveboard, more open, than the creation of the United
States of Europe."


people have never heard of Raymond Fosdick. More people have heard
of Jean Monnet ("Zhawn MoeNAY"), but not a lot more. Fosdick
had been a minor city official in New York City when he was hired
by John D. Rockefeller, Jr., to act on Rockefeller’s behalf. That
was in 1913. Rockefeller began paying him $10,000 a year, which
was the equivalent of $200,000 a year today, except that 1913 was
the first year of the income tax, with rates for most people well
under 6%.

career blossomed. By 1919, he was the American Undersecretary General
of the Versailles Peace commission/League of Nations. He worked
closely with Monnet, who was France’s Undersecretary. The League
of Nations had just been formed, although the United States was
not yet part of it, and never would be.

1919, Fosdick sent a letter to his wife. He told her that he and
Monnet were working daily to lay the foundations of "the framework
of international government." [July 31, 1919; in Fosdick, ed.,
on the League of Nations
(Princeton, New Jersey: Princeton
University Press, 1966), p. 18.]

was no idle boast. Fosdick returned to the United States in 1920
when the Senate refused to ratify the League of Nations treaty.
He immediately went to work full-time for Rockefeller as the head
of the Rockefeller Foundation. In 1958, he wrote the only official
biography of Rockefeller. His brother, Harry Emerson Fosdick, became
Rockefeller’s pastor in 1925, for whom Rockefeller built the Riverside

Europe, Monnet became the driving force behind the creation of the
European Common Market and the New European order. His connections
to the American Establishment had made this possible. [Francois
Duchene, Jean
Monnet: The First Statesman of Interdependence
(New York:
Norton, 1994), p. 63; Richard J. Barnet, The
Alliance: America-Europe-Japan, Makers of the Postwar World

(New York: Simon & Schuster, 1983), ch. 3.] Monnet died in 1979.

strategy was to conceal from the public the long-run political goals
of the planners: a common European government possessing final sovereignty
over the member nations. Instead, he persuaded Western European
governments to enter into a free-trade organization. The first major
step was taken in 1951: the creation, by the Treaty
of Paris
, of the innocuous-sounding European Coal and Steel
Community. In the preamble of the treaty, the authors did hint at
the broader implications of the treaty.

that world peace can be safeguarded only by creative efforts commensurate
with the dangers that threaten it,

that the contribution which an organized and vital Europe can
make to civilization is indispensable to the maintenance of peaceful

that Europe can be built only through practical achievements,
which will first of all create real solidarity, and through the
establishment of common bases for economic development,

help, by expanding their basic production, to raise the standard
of living and further the works of peace,

to substitute for age old rivalries the merging of their essential
interests; to create, by establishing an economic community, the
basis for a broader and deeper community among peoples long divided
by bloody conflicts; and to lay the foundations for institutions,
which will give direction
to a destiny henceforward shared,


in 1957 came the Treaty of Rome, which established the European
Economic Community, better known as the Common Market. Step by step,
this organization added layers of regulatory agencies, to "level
the playing field," so that producers in member nations countries
could not compete solely on price. It was never free trade, always
managed trade — managed by trans-national agencies with the
power to impose economic sanctions on recalcitrant member states.


preliminary outline of this economic/political strategy was published
in 1912 in an anonymous novel, Philip
Dru: Administrator
. It was written by a Texas political
boss, "Col." E. M. House. Dru established zero tariffs,
social security legislation, a regional government for North America,
and international cooperation. We read in Chapter LI, regarding
U.S.-Mexico relations:

custom duties are to be abolished excepting those uniform tariffs
that the nations of the world have agreed upon for revenue purposes,
and which in no way restrict the freedom of trade. It is our further
purpose to have a constitution prepared under the direction and
advice of your most patriotic and wisest men, and which, while
modern to the last degree, will conform to your habits and customs.

acronym NAFTA comes to mind.

book is better known today than it was in 1912, because House became
Wilson’s senior advisor in 1913 and in 1919 ran the American delegation
to Versailles — "The Inquiry" — until Wilson
actually arrived at the peace conference.

Inquiry became the Council on Foreign Relations in 1921.

economic/political outline in House’s novel was extended in the
1930s by John Foster Dulles, a fabulously wealthy New York lawyer,
who had attended Princeton a few years after Raymond Fosdick graduated.
Both men had attended during Woodrow Wilson’s era as president of
Princeton (1902—10). Both men left their personal papers to

grandfather had been Secretary of State under Benjamin Harrison.
His uncle had been Secretary of State under Wilson, replacing William
Jennings Bryan, who had resigned in protest in 1915 when he realized
that Wilson was moving America into a war against Germany. Dulles
was a member of House’s team of young men at the Versailles peace
conference in 1919. He served as counsel to the U.S. Peace Commission.
Dulles would later serve as Eisenhower’s Secretary of State. His
brother Allen ran the CIA under Eisenhower, was fired by Kennedy
after the Bay of Pigs fiasco, and ended his public career as chairman
of the Warren Commission’s investigation of the Kennedy assassination.

wrote in the 1930s about creating an international free trade zone
in which corporations chartered by the League of Nations would enjoy
the advantage of tariffs set at zero. They would pay the League
a tax for the privilege. Variations of this outline were disseminated
within the foreign policy Establishment and multinational corporate

note: Dulles served as legal counsel for Harry Emerson Fosdick
in Fosdick's 1924 heresy trial by the Presbyterian Church, which
Fosdick settled by resigning as a preacher in a New York City
Presbyterian Church, which was not a great sacrifice on his part,
since (1) he had always been a Baptist; and (2) John D., Jr.,
got his local Baptist church to hire Fosdick. Harry had been on
the Rockefeller Foundation's board ever since Junior took over
in 1917.]

Fosdick was a long-term strategist. In the 1940s, he financed the
best free market economists he could locate to promote the ideal
of free trade. Ludwig von Mises and his disciple Wilhelm Roepke
each published a book that had been financed by the Rockefeller
Foundation. Yet neither of them believed in setting up a world government.
This did not bother Fosdick. He and Monnet adopted the same strategy:
first free trade, then the creation of a regional government that
possesses judicial sovereignty. This plan has been systematically
promoted by the Trilateral Commission, created in 1973 by John D.
Rockefeller, Jr.’s son, David.

yet, the plan has not taken root in the Western hemisphere. NAFTA
(North American Free Trade Association) is the equivalent of the
old Common Market, but it has been granted only provisional regulatory
powers, not actual sovereignty. In Europe, the European Union (EU)
does possess considerable sovereignty. Final sovereignty was to
have been established by means of the EU’s Constitution. But the
European ship of state has now hit two icebergs. The scraping sound
was heard above decks. There are enough lifeboats on board for the
passengers, but not for the crew.

the crew graciously go down with the ship? Not this crew! Women
and children had better watch out for themselves.


Eurocrats can hardly believe it. They are in shock. They are staggering
around like a mole that has been hit on the head with a shovel.

International Herald Tribune is the English-language newspaper
of international record. Until late 2002, it was jointly published
by The New York Times and The Washington Post, when
the Times bought full ownership. It
reported the following on June 2:

ratification of the European Union constitutional treaty must
go on, Europe’s leaders declared on Wednesday even after the Netherlands
followed France and overwhelmingly rejected the treaty in a national

to play down the sense of crisis, the European Union refused to
pronounce the constitution dead.

debate must continue," said Jean-Claude Juncker, prime minister
of Luxembourg and the current holder of the rotating EU presidency.

keep thinking of the bumper sticker: "Which part of u2018no’ don’t
you understand?" They cannot believe it. They refuse to accept

ratification process should continue in other member states, Juncker
said, because "we want other member states to have the opportunity
to tackle the same debate."

called this "a difficult moment for Europe but it is a moment
we think Europe will get through."

is not the problem," Barroso said. "Europe is the solution
to the problems of European citizens."

these people, "Europe" means the final installment of
trans-national political sovereignty. For them, "Europe"
is not a common culture with multiple traditions. "Europe"
for them is a bureaucratic system that would have been imposed by
a Constitution so lengthy that nobody except lawyers could understand
it, or at least parts of it. "Europe is the solution to the
problems of European citizens." This is not the way that large
majorities in France and Holland saw the Eurocrats’ Europe. On the
contrary, they saw the Eurocrats’ Europe as their number-one problem.
They went to the polls and solved it. They voted no.

Eurocrats cannot believe that they got so close, after at least
85 years of carefully laid plans, only to see the final ratification
process go down to a resounding defeat, not once but twice in the
same week.

the French really need is another chance, the French voters are
assured. The Dutch voters, too.

and diplomats said they did not expect countries to abandon the
treaty at the June summit meeting. If they could not agree together
to kill the treaty, leaders would probably delay the ratification
process, they said.

would give France and the Netherlands the chance to put the treaty
before their electorate once more — perhaps in an amended
form — before other countries went ahead with their own ratification.

overwhelming majority of countries will want to continue the process
of ratification," said John Palmer, political director of
the European Policy Center in Brussels.

have seen all this before. Two boys in a schoolyard flip a quarter
for possession of a bag of really choice agate marbles. One guy
calls "heads." The coin comes up tails. His immediate
response: "Two out of three!" The Eurocrats just lost
the highest-stakes coin toss of our generation. Now they want two
out of three. But the day that they get a "yes" vote of
50.001%, the voting will be over. Forever, if they get their way.

do not think they will get their way.


defeat of the proposed Constitution calls into question that most
precious of political resources, legitimacy. From now on, every
attempt by Eurocrats to centralize administrative power will be
met by organized resistance. Those opposing the Eurocracy will have
this on their side: "the people" have spoken. They have
said "no" to the final conclave of the secular cardinals.
They have sent the Eurocrats a message: "Enough!"

Eurocrats since 1951 have dressed themselves in the wardrobe of
political legitimacy by dipping into the economic cornucopia provided
by increased trade. They have wrapped themselves in the cloak of
economic prosperity that has been produced by an increasingly free
market, and have said: "The reason why we have prosperity is
because we have a regulated market, administered trade, and the
rule of law."

the basis of the growing prosperity was not the layers upon layers
of Common Market and European Union bureaucracy. Economic growth
came because the European trade zone operated to reduce the restrictions
on producers and consumers against working out mutually beneficial
exchanges. It was not the Eurocrats’ layers of administration that
provided the expanding wealth; rather, it was the free market’s
ability to provide opportunities for individuals to create wealth
on their own.

Jean Monnet’s original efforts until the present, the Eurocracy
was a gigantic bait-and-switch operation. The Eurocrats sold the
idea of political union by heralding the benefits of free trade.

great irony is that voters in France and Holland decided that they
did not like free trade, because it imposes too much pressure on
producers to meet the competition. They decided to sink the ship
of state because they still refuse to believe in economic liberty.
Given the threat to liberty of the looming political leviathan,
I say, "Hooray for economic ignorance!" Europeans will
be a lot better off with today’s relatively low tariffs and no Constitution.
Better to have less bait and no final switch.

erosion of political liberty will continue in Europe. But now this
erosion process has been successfully challenged in the one currency
unit that officially matters to the Eurocrats: votes. For the political
cardinals, there is only one official sacrament: voting. They came
up short twice in four days.

course, voting is really a means to an end. The real sacrament is
power, but the Eurocrats dare not say this publicly. They have lost
two crucial referenda; now they want another chance. They want two
out of three.

if they get another chance, even if winning means rigging the computers,
they will never get what they want: legitimacy. No matter what happens
next, they have failed. The public will always suspect skullduggery
if there are more referenda and different outcomes. The Eurocrats
may win some future referenda; they will not win legitimacy. They
need legitimacy, for legitimacy is what every ruler needs if he
is go gain widespread voluntary compliance to his edicts. Without
voluntary compliance, no ruler can implement his plans, because
it takes too many policemen to force the population to comply.


turn of events may turn out to be as important as August 19—21,
1991, when the Communists’ attempted coup against Yeltsin went belly-up.

have been four major political movements in the West since 1776:
the French Revolutionary tradition (Rousseau), which died with the
Soviet Union; the limited political sovereignty movement, which
I call the right wing of the Enlightenment (Adam Smith/Jefferson/Jackson);
the Fabian socialist/social democracy political tradition, beginning
in the late nineteenth century, which also went down with the Good
Ship Marx in 1991; and managed market/political bureaucracy (Rockefeller/Keynes/Monnet).
The fourth movement has just suffered its biggest setback since
the defeat of Wilson’s League of Nations treaty in 1920.

call the process EUthanasia. The voters of France and Holland stuck
a needle into the arm of the sclerotic Eurocracy. Next step: the
final injection. I hope I’m still around to see the death throes
of that pretentious experiment in social engineering. But even if
I’m not, I can see it coming.

question is: Who will inherit? The spiritual heirs of Adam Smith
or the spiritual heirs of Muhammed? Long-term, I’m betting on Adam
Smith’s heirs, but probably with Chinese accents. I call it EU-then-Asia.
Price competition works cultural wonders. So do container ships.

4, 2005

North [send him mail] is the
author of Mises
on Money
. Visit
He is also the author of a free multi-volume series, An
Economic Commentary on the Bible

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